Ask not what your small business is able to do for monthly payment collection, but what competent, affordable payment collection is able to do with regards to your small business. Just about the most efficient, inexpensive payment procedures currently available is a NAEDO or Non-Authenticated Early Debit Order. This payment procedure combines the efficiency of debit orders with the clever monitoring of credit payments to improve the likelihood of successful collections and lower fees allocated to retries and returned debits.
NAEDO debit orders were introduced coupled with AEDO or Authenticated Early Debit Orders in South Africa in September 2006. These somewhat new payment systems were brought to increase debit order efficacy by letting smart, fair action of a debit order as near to a credit payment (e.g. salary deposit) as possible. AEDO payments tend to be linked to pos transactions in which a future dated debit is mandated by pin authentication, with a debit or credit card or banking account for example. NAEDO debits don’t require pin authorization, have got a R5,000.00 per item transaction cap and therefore are only approved to get submitted on accounts.
To reduce the increasing problem of preferential payment access where some classes of beneficiaries always had use of account holder funds before others the NAEDO and its contemporaries were brought in. The creation of new legislation allowed for the phasing out from existing preferential practices eradicating unfair reduced collection success rates for specific beneficiary classes and establishing an identical field for anyone. NAEDO’s are processed in a random, non-preferential basis, providing every beneficiary or service agency with a equal and fair ability to collect payments.
The magic behind a Non-Authenticated Early Debit Order (NAEDO) is it might be enhanced by using tracking facilities. This implies the beneficiary or service provider can stretch the mandated date over a specified period of time allowing the debit order instruction to always be kept active, but unprocessed, until a credit payment is receive within the account. This significantly enhances the creditor’s probability of collecting.
All considered, a NAEDO does not only give your business an honest potential for collecting funds, but increases your likelihood to do this by permitting tracking to induce the debit at the most opportune time. In case you are concerned about your collection efficacy now may just be the time to change to NAEDO.
Deb Odres is an expert in business payment collection. Debby specialises in NAEDO debit orders and the best debit order procedures for your needs.